Steel Dynamics STLD · USD

​​Note 12. Segment InformationThe company’s chief operating decision maker (CODM), who is the Chief Executive Officer, analyzes the results of the business through the following reportable segments: steel operations, metals recycling operations, steel fabrication operations, and aluminum operations. The segment operations are more fully described in Note 1. Description of the Business and Summary of Significant Accounting Policies to the consolidated financial statements. The CODM assesses segment performance and allocates resources primarily based on operating income. The CODM uses operating income to allocate operating and capital resources and assesses performance of each segment by comparing actual operating income results to historical and previously forecasted financial information. The accounting policies of the reportable segments are consistent with those described in Note 1 to the consolidated financial statements. Intra-segment sales and any related profits are eliminated in consolidation.

Note 8. Commitments and ContingenciesThe company has entered into certain commitments with suppliers which are of a customary nature. Commitments have been entered into relating to future expected requirements for commodities such as electricity, water, natural gas and its transportation services, fuel, air products, zinc, and electrodes. Certain commitments contain provisions which require that the company “take or pay” for specified quantities at fixed prices without regard to actual usage for periods of generally up to 5 years for physical commodity requirements and commodity transportation requirements, with some extending beyond, and for up to 14 years for air products and 26 years for water products. The company utilized such “take or pay” requirements during the past three years under these contracts. The company believes that production requirements will be such that consumption of the products or services purchased under these commitments will occur in the normal production process.Note 8. Commitments and Contingencies (Continued)The company’s commitments for these agreements with “take or pay” or other similar commitment provisions for the years ending December 31 are as follows (in thousands):​​​​​​​2026​$ 331,503​​2027​​ 49,643​​2028​​ 38,291​​2029​​ 19,973​​2030​​ 18,853​​Thereafter​​ 160,882​​​​$ 619,145​​At December 31, 2025, the company has outstanding commitments of $335.5 million related to ongoing construction of property, plant, and equipment, primarily related to the completion of the aluminum flat rolled products mill, as well as other steel operations expansion projects in 2026. The company’s commitments for operating leases are discussed in Note 11. Leases.The company is involved in various litigation matters, including administrative and regulatory proceedings, that arise in the ordinary course of business, none of which are expected to have a material impact on the company’s financial condition, results of operations, or liquidity.

Note 3. Long-Term DebtThe company’s borrowings consisted of the following at December 31 (in thousands):​​​​​​​​​​​​​2025​2024​​​​2.400% senior notes due 2025​ -​​ 400,000​​​​5.000% senior notes due 2026​ -​​ 400,000​​​​1.650% senior notes due 2027​ 350,000​​ 350,000​​​​4.000% senior notes due 2028​ 650,000​​ -​​​​3.450% senior notes due 2030​ 600,000​​ 600,000​​​​3.250% senior notes due 2031​ 500,000​​ 500,000​​​​5.375% senior notes due 2034​ 600,000​​ 600,000​​​​5.250% senior notes due 2035​ 750,000​​ -​​​​3.250% senior notes due 2050​ 400,000​​ 400,000​​​​5.750% senior notes due 2055​ 400,000​​ -​​​​Other obligations ​ 36,610​​ 28,803​​​​Total debt ​ 4,286,610​​ 3,278,803​​​​ Less debt issuance costs and original issue discounts​ 75,447​​ 47,796​​​​Total amounts outstanding​ 4,211,163​​ 3,231,007​​​​ Less current maturities ​ 34,655​​ 426,990​​​​Long-term debt $ 4,176,508​$ 2,804,017​​​Financing Activity​In March 2025, the company issued $600.0 million of 5.250% notes due 2035 and $400.0 million of 5.750% notes due 2055. Proceeds from these notes were used for repayment of the company’s $400.0 million of 2.400% notes due 2025 and for other general corporate purposes. In November 2025, the company issued $650.0 million of 4.000% notes due 2028 and an additional $150.0 million of 5.250% notes due 2035. Proceeds from these notes were used to redeem the company’s $400.0 million of 5.000% notes due 2026 and for other general corporate purposes.Senior Credit Facility, due 2028​On July 19, 2023, the company entered into an unsecured credit agreement comprised of a senior unsecured credit facility (Facility), which provides a $1.2 billion unsecured Revolver, maturing July 2028. Subject to certain conditions, the company has the opportunity to increase the Facility size by $500.0 million. The unsecured Facility is available to fund working capital, capital expenditures, and other general corporate purposes. The Facility contains financial covenants and other covenants pertaining to the company’s ability to incur indebtedness and permit liens on certain assets. The company’s ability to borrow funds within the terms of the unsecured Facility is dependent upon its continued compliance with financial and other covenants. At December 31, 2025, the company had $1.2 billion of availability on the Facility, $9.2 million of outstanding letters of credit and other obligations which reduce availability, and there were no borrowings outstanding.

​​Note 4. Income TaxesComponents of earnings before income taxes and noncontrolling interests for the years ended December 31 are as follows (in thousands):​​​​​​​​​​​​​2025​2024​2023​​United States income$ 1,489,479​$ 1,992,814​$ 3,198,048​​Foreign income (loss)​ 3,492​​ (9,933)​​ 20,895​​ Total income before income taxes$ 1,492,971​$ 1,982,881​$ 3,218,943​​The company files a consolidated federal income tax return. The provision for income tax expense for the years ended December 31 is as follows (in thousands):​​​​​​​​​​​​​​​​​​​​​​​​2025​2024​2023​​Current income tax expense ​​​​​​​​​​Federal$ 172,988​$ 409,586​$ 600,499​​State​ 32,559​​ 57,942​​ 91,965​​Foreign​ 4,850​​ 7,980​​ 3,482​​Total current​ 210,397​​ 475,508​​ 695,946​​Deferred income tax expense (benefit)​​​​​​​​​​Federal​ 96,693​​ (26,311)​​ 38,172​​State​ 7,322​​ (12,476)​​ 15,355​​Foreign​ (8,752)​​ (3,796)​​ 2,138​​Total deferred​ 95,263​​ (42,583)​​ 55,665​​Total income tax expense $ 305,660​$ 432,925​$ 751,611​​​A reconciliation of the statutory rates to the actual effective tax rates for the years ended December 31 are as follows (in thousands, except percentages):​​​​​​​​​​​​​​​​​​​2025​2024​2023U.S. Federal Statutory Tax Rate$ 313,524​ 21.0%​$ 416,405​ 21.0%​$ 675,978​ 21.0%State and local income taxes, net of federal income tax effect(a)​ 31,505​ 2.1​​​ 35,918​ 1.8​​​ 84,784​ 2.6​Foreign tax effects​ (4,635)​ (0.3)​​​ 6,270​ 0.3​​​ 1,232​ 0.1​Effect of cross-border tax laws​ (2,388)​ (0.2)​​​ (5,411)​ (0.3)​​​ (2,445)​ (0.1)​Tax credits - federal research & development​ (35,050)​ (2.3)​​​ (18,036)​ (0.9)​​​ (11,329)​ (0.4)​Nontaxable or nondeductible items​ 2,240​ 0.2​​​ (1,557)​ (0.1)​​​ (784)​ -​Changes in unrecognized tax expense (benefits)​ 464​ -​​​ (664)​ -​​​ 4,175​ 0.1​Effective tax rate $ 305,660​20.5%​$ 432,925​21.8%​$ 751,611​23.3%​(a) State taxes in Indiana, Illinois, Mississippi, and Pennsylvania for 2025, Indiana, Michigan, and California for 2024, and Indiana, Illinois, Mississippi, Pennsylvania, and Michigan for 2023 made up the majority (greater than 50%) of the tax effect in this category.​​Note 4. Income Taxes (Continued)Cash taxes paid, net of refunds, by jurisdiction for the years ended December 31 are as follows (in thousands):​​​​​​​​​​2025​2024​2023​​​​​​​​​U.S. Federal$ 116,060​$ 399,306​$ 560,000U.S.

​​Note 11. LeasesThe company has operating leases relating principally to transportation and other equipment, and some real estate. The company determines if an arrangement contains a lease at inception, which generally occurs when the arrangement identifies a specific asset that the company has the right to direct the use of and obtain substantially all of the economic benefit from use of the identified asset. Certain of the lease agreements contain rent escalation clauses (including fixed and index-based escalations), and options to extend or terminate the lease. For purposes of calculating operating lease obligations, the company’s lease terms include options to extend the lease when it is reasonably certain that the company will exercise such option. The company uses its incremental borrowing rate at lease commencement to determine the present value of lease payments. The incremental borrowing rate is the rate of interest the company could borrow on a collateralized basis over a similar term with similar payments. Operating lease expense is recognized on a straight-line basis over the lease term.Operating lease right-of-use assets and lease obligations included in the consolidated balance sheets at December 31, are as follows (in thousands):​​​​​​​​​​2025​​2024​Right-of-use assets under operating leases:​​​​​​ Other assets - noncurrent$ 170,183​$ 113,500​Lease obligations under operating leases:​​​​​​ Accrued liabilities$ 24,159​$ 19,915​ Other liabilities - noncurrent​ 147,495​​ 94,417​​$ 171,654​$ 114,332​The weighted average remaining lease term for our operating leases is nine years as of December 31, 2025 and 2024. The weighted-average discount rate is 5.00% and 4.46% as of December 31, 2025 and 2024, respectively. Future operating lease liabilities as of December 31, 2025, for the next five years and thereafter are as follows (in thousands):​​​​​​​​​​2026$ 31,365​​​​2027​ 28,882​​​​2028​ 25,981​​​​2029​ 22,469​​​​2030​ 19,621​​​​Thereafter​ 83,312​​​​Total undiscounted cash flows​ 211,630​​​​ Less imputed interest​ (39,976)​​​​Lease obligations under operating leases$ 171,654​​​​​​​​​​Operating lease expense included in the consolidated statements of income was $27.9 million, $27.4 million, and $27.9 million for the years ended December 31, 2025, 2024, and 2023, respectively. Cash paid related to operating lease obligations was $23.2 million for the years ended December 31, 2025 and 2024, respectively, and $22.

Note 2. Business CombinationsUnited Steel SupplyAs of December 31, 2024, the company had a 90% controlling interest in United Steel Supply, LLC. On April 1, 2025, a noncontrolling member of USS exercised its option to require SDI to purchase its 5% equity interest, increasing SDI’s ownership to 95%. The remaining noncontrolling member has the option to require SDI to purchase, and SDI has the option to acquire, the outstanding 5% equity interest of USS. Redeemable noncontrolling interests related to USS are $30.0 million and $60.0 million at December 31, 2025, and 2024, respectively. ​New Process Steel, L.P.On December 1, 2025, the company acquired the remaining 55% equity interest in New Process Steel, L.P., increasing its ownership from 45% to 100% and obtaining control. NPS is a metals solutions and distribution supply-chain management company headquartered in Houston, Texas, with a focus toward growing its value-added manufacturing applications. The acquisition of NPS expands the company’s exposure to value-added manufacturing opportunities. Prior to the 2025 acquisition date, the company accounted for its 45% minority equity interest in NPS as an equity-method investment. Upon the acquisition of the remaining interest, the previously held equity interest was remeasured to an acquisition-date fair value of $220.4 million, based on the purchase price of the remaining 55% interest. The company recognized a gain of $6.5 million as a result of remeasuring its prior equity interest in NPS before the business combination, included in other (income) expense, net in the consolidated statements of income for the year ended December 31, 2025. ​Note 2. Business Combinations (Continued)The total purchase consideration consisted of the fair value of the previously held equity interest and the consideration transferred to acquire the remaining ownership interest. Operating results of NPS from and after December 1, 2025, have been included in the company’s consolidated financial statements within the steel operations segment. The acquisition-date fair value of the consideration transferred totaled $449.

​We recognize the importance of assessing, identifying, and managing material risks associated with cybersecurity threats, utilizing, from time to time, tabletop exercises, business unit assessments, threat modeling, impact analyses, internal audits, external audits, third party vulnerability scans, third party penetration tests, and engagement of third parties to conduct analysis of our information security programs, including an overall assessment utilizing the NIST standards. These risks include, among other things: operational risks, intellectual property theft, fraud, extortion, harm to team members or customers, and violations of data privacy or security laws.​Our Information Security Team has established a cybersecurity risk management program of policies and processes for assessing, identifying, and managing risk from cybersecurity threats. We have integrated these processes into our overall risk management systems and processes, and routinely assess risks from cybersecurity threats, including any potential unauthorized access to or activity conducted through our information systems that may result in material adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein. This program includes established reasonable safeguards to minimize the identified risks; processes to reasonably address any identified gaps in existing safeguards; updates to existing safeguards as necessary; and monitoring the effectiveness of those safeguards. ​Our safeguards include continuous network monitoring, complex passwords, team member training that reinforces our policies, standards, and practices, incident response capability reviews and exercises, and cybersecurity insurance and disaster recovery plans for the protection of our assets. The information security training and awareness program engages personnel through training modules on how to identify potential cybersecurity risks and protect our resources and information. This training is mandatory for all team members monthly, and is supplemented by companywide testing initiatives, including periodic phishing tests.​Our cybersecurity risk management program also assesses third party providers, such as vendors, suppliers, and other business partners.

Note 10. Retirement PlansThe company sponsors several 401(k) retirement savings and profit sharing plans (Plans) for eligible employees, which are considered “qualified plans” for federal income tax purposes. The company’s total expense for the Plans was $147.0 million, $209.0 million, and $312.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. Profit sharing expense for eligible employees is 8% of consolidated pretax income excluding noncontrolling interests and other items. The resulting profit sharing expense under the Plans was $120.0 million, $165.2 million, and $264.6 million for the years ended December 31, 2025, 2024, and 2023, respectively; of which up to $96.0 million, $132.2 million, and $211.6 million, respectively, was directed by the company’s board of directors to be contributed to the Plans (subject to total Plan contribution limitations), with the remaining amounts each year paid directly in cash to the Plans’ participants.